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Oil price drops as Europe plans U.S. oil aid
02 Sep 2005 16:02:25 GMT

Source: Reuters

(Updates prices)

By Janet McBride and Peg Mackey

LONDON, Sept 2 (Reuters) - Oil prices fell by a dollar on Friday as Europe prepared to tap up to two million barrels a day of fuel from emergency reserves to help ease a petrol crisis threatening the United States.

Petrol tanks have run down in the world's biggest consumer after Hurricane Katrina tore at the heart of the U.S. energy sector in the Gulf of Mexico on Monday and shut in nearly two million barrels per day (bpd) of refining capacity.

As the crisis deepened, President George W. Bush asked the International Energy Agency (IEA) to release petrol reserves and urged Americans to conserve fuel.

U.S. crude <CLc1> was off 97 cents at $68.50 at 1554 GMT, after dropping more than $2 a barrel to $67.30. NYMEX will be shut on Monday for the U.S. Labor Day holiday that marks the end of the driving season. London Brent <LCOc1> was down 67 cents to $67.05.

The Paris-based IEA says it is still consulting members and awaiting a report on the extent of Katrina's damage to U.S. Gulf refiners before deciding on a stock release.

But European allies said they were prepared to spring to the rescue of the United States. Germany, Spain, France and Italy said they would back the IEA, coordinator of emergency reserves for 26 OECD countries, if it asked them to dip into stocks.

German Chancellor Gerhard Schroeder said a release of 60 million barrels over 30 days was under consideration.

"We assume that would lead to there being sufficient energy reserves in the market and, second, we would wish the pressure on the prices of oil products to be lessened," Schroeder said.

It would take about 10 days for gasoline from the continent to reach the United States once a decision is taken. Europe has already booked up to 30 cargoes of petrol to ship to the United States, leading brokers to warn of an impending vessel shortage.

Gasoline prices, which have led the market's gains on fears that already low stockpiles would be squeezed severely, traded 16.65 cents lower at $2.245 a gallon.

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But European allies said they were prepared to spring to the rescue of the United States. Germany, Spain, France and Italy said they would back the IEA, coordinator of emergency reserves for 26 OECD countries, if it asked them to dip into stocks.

France is willing to help? Wow, it must be bad. Oh wait, there are no guns involved.

They just want to make sure we rebuild the French Quarter...

I take offense at your supposition that I am not doing something already. I do not feel that a discussion of events that effect my life are petty. Everyday, forty-one thousand children worldwide die of hunger. If you want to start preaching, our entire existences are petty by comparison.

How long until the gubmint gets in on the action and tacks on a percentage of the total price per gallon rather than the current "flat" tax ...

State Tax Partial Reason N.C. Gas Prices Among Highest In U.S.
State Gas Tax Fifth-Highest In Nation

POSTED: 10:08 am EDT October 3, 2005
UPDATED: 8:05 pm EDT October 3, 2005

RALEIGH, N.C. -- Just when you thought you had heard all the bad news from the gas pump, there is more to put in your tank.

According to AAA, the average price per gallon in North Carolina is $3.07 -- the highest-ranked state in the continental United States. The District of Columbia and Hawaii have higher gas prices than North Carolina, at $3.14 and $3.24 respectively.


"That is surprising," said driver Matthew Carter. "Hawaii is an island, so, obviously they'd have high gas prices, but I'm not sure why we have such high gas prices."

Carter is not alone in wondering why the cost of gas is so high in the Tar Heel state.

Something motorists may not think about when paying for gas is the state's gas tax. North Carolina has the fifth-highest gas tax in the nation and the highest in the South. For example, Virginia's gas tax is 17 cents per gallon and South Carolina's is 16 cents per gallon, while North Carolina motorists pay 27 cents per gallon.

About 17.5 cents of the 27 cent tax is a flat rate. There is also a variable rate that increases when the price of gas increases. It changes every six months, based on the price of gas during that period. That is why the gas tax could jump between 2 and 5 cents Jan. 1.

Then, retailers add their costs.

Factor in that North Carolina gets about 90 percent of its gas supply from the hurricane-ravaged Gulf, which usually produces 1.5 million barrels of crude oil each day. Recovery in the region remains slow, with 98 percent of the area's crude production still shut in and natural gas output down 79 percent, the U.S. Minerals Management Service said.

With gas prices so high, the North Carolina Petroleum Marketers Association wants a cap on the gas tax for about a year while wholesale prices get back under control.

Gov. Mike Easley, however, says the state would lose too much revenue, even with a temporary freeze.

Around the state, buying gas in Asheville could hurt the most with a gallon of regular unleaded averaging $3,19. That same gasoline is about $3.09 in Charlotte and about $3.02 in Fayetteville. WRAL found most stations in the Triangle had gas prices above $3, and there were some stations charging $3.58 for a gallon of regular unleaded.

Repeated consumer studies show American drivers are the least sensitive to gas prices. One predicts if gas prices hit $4 a gallon and stayed there for a year, gas purchases in the U.S. would only fall 5 percent.

I got an e-mail this morning that suggested we might see prices drop to close to $2 a gallon after this weekend for regular. Wonder if there is any truth to it.

Gassed up Ann's car last night at the Exxon on Capital Blvd next to Autozone. It was like $2.69 for Premium and $2.39 for Regular. But right next door it was higher, and, $3.29 for diesel. Boy are they still sticking it too the diesel crowd...

And just incase you were feeling bad for any costs the big oil companies might have incurred lately...


NEW YORK (Reuters) - Exxon Mobil Corp. posted a quarterly profit of $9.9 billion Thursday, the largest in U.S. corporate history, as it raked in a bonanza from soaring oil and gas prices.

The record earnings topped the $9 billion net profit reported Thursday by Royal Dutch Shell PLC.